I have bought a house and land and the block next door, all in one transaction. Stamp duty paid on the lot. If I sold the house again, what price would be designated for it? Would medium price for blocks in the area be taken away from the whole price by the tax dept. I would then have a loss on the house, not a gain and wouldn't have to pay cgt
You need a valuer to work out what portion of the original price related to the house. Then you can take into account a relevant portion of the costs such as stamp duty etc.
I don't think the PPOR exemption would apply to vacant land next door or to land chopped off and sold as there is no residence on it.
It would depend upon the situation - if it could be demonstrated that the two blocks of land were utilised for the ppor and curtilige then it may be exempt. Freefurn, why would you be selling at a loss in this market? (Or is it only a paper loss?) How did you come to purchase h&l and land without separate prices (ie single contract of sale and no previously advertised pricing for either property?).
Land adjoining exempt main residence + land is also part of the exempt land provided it is actually USED as part of that residence and the total area falls under 2Ha. ie tennis court, pool or expansive gardens...even car parking. https://www.ato.gov.au/General/Capi...ngs,-adjacent-land-and-associated-structures/ In the OP example I would have concern that such a venture so soon after acquisition may well be indicative of a profit making intention (whether or not a profit arises) and not be treated under the CGT provisions.
And provided it is sold at the same time as the home. If sold separately then I don't think the main residence exemption could apply.
I don't agree if the sale is the house and land. ie : House + land = Lot 1. Vacant adjoining land is Lot 2. Lot 1 acquired April 2010 and Lot 2 acquired June 2010. Lot 1 owner occupied. July 2015 owner considers sale of Lot 1 (house and land) so that Lot 2 can have a new house built on it from growth in value. Owners sells and moves to rented apartment. A few issues : 1. If Lot 2 acquired before Lot 1 then for a period of time lot 1 remains liable to CGT as it cant be a MR when its not adjoining a MR. (ie until Lot 1 is adjoining Lot 2 cannot be a main residence) 2. If its Lot 2 that is sold rather than Lot 1 then yes I agree (this is the subdiv of backyard issue that many people think is tax free) 3. If Lot1 is sold then Lot 2 would cease the MRE. The absence rules would not apply. The main residence exemption cannot apply to vacant land unless it is adjoining an actual occupied residence and used as part of that residence. I still have a concern as to why someone would buy an adjoining lot of vacant land. They may well just want a bigger house lot etc but its a high risk indicator for a dev intent
If sold together the vacant land could be exempt. But in this situation there appears to be Lot A land and house Lot B vacant land Lot B is being sold. So even if Lot A was the main residence I believe that the main residence could not apply to lot B if it is sold separately.
I bought this property as a rental so no ppr exemption. So if I sold the house as a loss on the original price, I could make money and not have to pay cgt
Stop over simplifying things Terry. Sell at a loss, do not pass maths, do not collect $200. Beats me why you'd sell at a loss just to lose money and avoid paying tax. I would prefer to make a profit and pay tax than to carry forward a loss that I may never utilise.
If I got the house valued at its real price for the area, this would be a much higher proportion of the purchase price. If I then resold the house for approx. this price, I would not have to pay cgt, plus I would have the block really cheap which I am building on
Don't think you are working it out correctly. Give us some numbers to check. You need to work out the proportion of the purchase price relating to the house, not its value.
